Boeing to close C-17 line three months earlier than anticipated

April 8, 2014

Updated 3:23 p.m.

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The Air Force's last C-17 leaves Long Beach on Sept. 12, 2013. The Air Force took delivery of it's 223rd C-17 Globemaster III during a ceremony at Boeing's manufacturing plant at the Long Beach Airport. JEFF GRITCHEN,, FILE PHOTO: JEFF GRITCHEN, STAFF PHOTOGRAPHER

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Boeing employees watch a delivery ceremony for the Air Force's last C-17 in Long Beach on Sept. 12, 2013. The Air Force took delivery of it's 223rd C-17 Globemaster III during a ceremony at Boeing's manufacturing plant at Long Beach Airport. The C-17 in the background is destined for the Indian Air Force. JEFF GRITCHEN,, FILE PHOTO: JEFF GRITCHEN, STAFF PHOTOGRAPHER

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The Air Force's last C-17 prepares to leave Long Beach on Sept. 12, 2013. The Air Force took delivery of it's 223rd C-17 Globemaster III during a ceremony at Boeing's manufacturing plant at Long Beach Airport. JEFF GRITCHEN,, FILE PHOTO: JEFF GRITCHEN, STAFF PHOTOGRAPHER

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A Boeing C-17 Globemaster III is being assembled at the Boeing assembly facility in Long Beach on July 31, 2012. The Boeing Company has completed the integration of the fuselage and the wing assembly of India's first Boeing C-17 Globemaster III. India signed an agreement with the U.S. government in 2011 to acquire 10 C-17 airlifters, making India the largest C-17 customer outside the U.S. DAMIAN DOVARGANES, FILE PHOTO: DAMIAN DOVARGANES, THE ASSOCIATED PRESS

The Air Force's last C-17 leaves Long Beach on Sept. 12, 2013. The Air Force took delivery of it's 223rd C-17 Globemaster III during a ceremony at Boeing's manufacturing plant at the Long Beach Airport. JEFF GRITCHEN,, FILE PHOTO: JEFF GRITCHEN, STAFF PHOTOGRAPHER

What it means

The news: Boeing Co. plans to close its Long Beach C-17 Globemaster line three months early, in mid-2015, after cutting back from 20 remaining orders to 17.

Layoffs: 2,200 California workers will be affected.

Financial hit: The company says the move will cost it $50 million in "inventory-related charges."

In the latest blow to Long Beach’s aerospace industry, Boeing Co. said Monday that it is closing the production line for its C-17 military cargo plane three months earlier than its initial estimate of late 2015.

In their announcement, Boeing officials said they had 17 planes remaining to be delivered, three fewer than the 20 previously planned.

The move affects 2,200 C-17 Globemaster workers in California, though a Boeing Military Aircraft spokeswoman said efforts would be made to shift some workers to other programs, while others could retire or leave the company as a way to mitigate layoffs.

The company announced plans in September to end C-17 production as contracts were drying up.

“Job reductions resulting from the Sept. 18, 2013, production completion decision began in early 2014 and will continue through closure, which is now mid-2015,” said Boeing spokeswoman Cindy Anderson.

Based on current market trends and the timing of expected orders, Boeing antiticipates completing C-17 production in mid-2015, she said, though she didn’t provide a specific month or date.

Boeing expects the decision to cost the company $50 million in “inventory-related charges,” which will be recorded in the Chicago-based company’s first quarter that ended March 31.

Overall, Boeing has delivered 223 C-17s to the Air Force, with the last one having been delivered in October.

Another 39 C-17s have been sold to eight customers outside of the U.S. – Australia, Canada, India, Kuwait, Qatar, the United Arab Emirates, the United Kingdom and NATO. Anderson said that her company plans to build 10 more C-17s in 2014 and seven in 2015, all for foreign customers.

Production on the last C-17 will begin in October.

Starting early next year, Boeing Co.’s 1,050 union workers who build the C-17 cargo plane in Long Beach will see the production line on the military cargo jet begin to wind down. It’s unclear how the remaining 3,000 salaried nonunion workers will be affected. They are involved with the C-17 and other engineering and research projects.

Officials with the United Auto Workers, Local 148, which represents Boeing’s union workers in Long Beach, weren’t immediately available for comment.

Local Boeing workers are still reeling from Boeing’s announcement earlier this year that the aerospace giant’s 777X commercial plane building program would not come to Southern California.

Nan Bouchard, vice president and general manager of the C-17 program with Boeing Military Aircraft in Long Beach, described the loss of 777X work in Long Beach as “sad.”

Bouchard put to rest any speculation that a part of the mammoth program could still be brought here.

A union vote by 35,000 members of the International Association of Machinists & Aerospace Workers in January sealed the deal to keep the production line in Washington state. The local union there made wage and benefit concessions to keep the nation’s biggest jobs-creation program in Everett.

Boeing also was offered a package of more than $8.5 billion in incentives to stay in Everett, as well as making road, factory and other improvements around the city where the aerospace giant has more than 4 million square feet of factory space.

Long Beach and California officials had pressed to bring some of the 777X wing assembly or other fabrication work to Long Beach.

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